By Andrea Dunlop, Managing Director of Access PaySuite.
Insurance plays a vital part in people’s day-to-day lives, offering consumers everyday peace of mind as well as providing vital financial support if and when things go wrong. Despite the fact inflation rates are dropping, high costs are still causing issues for insurance providers, as reports suggest car insurance premiums in particular will continue to increase into 2024.
Combined with a recent study conducted by Access PaySuite, showing that one in five people (21%) would be tempted to cancel their motoring insurance policy because of premium affordability worries, these spikes instil a great cause for concern.
For those insurers who were forced to dramatically raise premiums due to last year’s notably high double digit inflation rates – first-rate customer experience remains an important line of defence against policy cancellations and customer churn.
Consumer trends show the importance of a strong payment process. Of those surveyed in our recent study, 62% reported that being offered a wider choice of payment methods would positively impact their choice of insurance provider.
Providing a quick-win for insurers, flexible and secure payment services offer customers a simple and easy transaction process – streamlining customer experiences, and delivering the convenience we all crave when shopping online.
In an ideal world, a policyholder should be able to accept their quote, use their preferred payment method to complete a seamless transaction, and then receive prompt confirmation of payment. For direct debits and recurring payments, transactions should be automatically and reliably processed – allowing the customer to only concern themselves with this process again when renewing or altering their policy.
Accommodating for all customers
Offering a full suite of payment options is a vital part of customer experience. Almost seven in 10 (69%) people take the range of payment options into consideration when choosing an insurance provider.
To fully tap into the available market, understanding the specific demands of each demographic is key. Our data shows that there is a generational gradient when it comes to payment method preferences.
Perhaps not surprisingly, Gen Z consumers are at the forefront of embracing modern payment methods, including open banking and mobile-wallet transactions (49%). Coming in next are millennials (38%), followed by Gen X (20%), and then Baby Boomers (15%), who tend to stick to traditional payment options like in-person or over-the-phone transactions. The differences between these generations are quite pronounced, with a significant 26% of Gen Z consumers preferring to pay using mobile devices, while less than 3% of those aged 55 and above share the same preference.
While offering a full suite of payment methods allows consumers to pay in a way that best suits them, for some it comes down to more than a personal preference. Over a quarter (27%) of the UK population is digitally excluded, meaning they don’t have the ability, or inclination, to access digital tools. Many older consumers may have only been introduced to technology in later life, meaning they feel more comfortable completing such important purchases as organising insurance offline.
Therefore, providing a wide range of payment options ensures full inclusion and accessibility. As those who are comfortable with digital methods can self-serve, call centre staff are saved valuable time which they can reinvest in being readily available for those who need one-on-one assistance.
Avoiding payment complications
Despite the demand for them, frictionless payment experiences aren’t a given. In fact, our survey also found that, over the course of the last two years, 33% of consumers experienced payment failures with their insurance providers, while another third (33%) were overcharged on one or more occasions.
The positive rapport earned by providing a frictionless experience when setting up a payment can be quickly undone if issues crop up when processing the payments. When premium payment instalments are missed or incorrectly processed, rectifying the issue takes up staff time and causes undue stress for the policyholder. Overcharged, or doubled up payments become an unwelcome, unexpected expenditure, only exacerbated by the current economic pressures consumers are facing.
Manually handling a missed payment involves time-consuming processes, often involving many steps and multiple approvals. When numerous errors accumulate, the negative implications on efficiency can be stark. Automated systems provide simplified and easy to manage solutions – ensuring that any missed or failed payments are automatically retired, before escalating the issue to administrative staff.
Our survey found that, when it comes to making a payment for their insurance policy, four in 10 (41%) people rank their data being handled in a safe and secure way as most important. Unlike other areas, such as payment methods, this expectation is consistently high across all ages. Using a certified and trusted payment provider is a simple, but effective, way to demonstrate the security of payment portals.
As a minimum, when dealing with taking card payments, ensure your system is PCI DSS certified. These are a collection of 12 requirements that are set as a standard to protect consumer card information from fraud and misuse. Displaying security certificates can help consumers peace of mind during the payments process, allowing them to more easily input their payment information.
Simple and secure transactions should be the bread and butter of payment processes, so it stands to reason that consumers can experience great concern and discouragement if there is little to no evidence of this. Unfortunately, even when issues and complications are resolved promptly, errors are likely to stick at the forefront of policyholder’s minds when it comes to renewals – often leading to policy cancellations and a change of provider.
With this in mind, it is best to work preventatively, implementing systems that are designed to avoid these issues, instead of concentrating efforts on the time-consuming and costly tasks required to put out fires as and when they occur.
Reliable payment processing systems save both time for staff, and stress for policyholders – with admin heavy jobs, such as sharing information to other departments or retrying failed payments, taken care of automatically. Handing over these responsibilities to a payment system creates a level of consistency for consumers and means the vast majority will receive a simple, frictionless experience, while those who do need extra assistance – whether that be due to missed payments or any other concern – have access to readily available experts.
Ultimately, consumers crave convenience. Enabling policyholders to pay securely in whichever way they choose facilitates this basic want, delivers heightened customer satisfaction and offers consumers another reason to choose you as their insurance provider.
To learn more about insurance payment trends, visit: https://www.accesspaysuite.com/blog/leveraging-payments-five-strategies-for-insurers-to-drive-value-and-growth/
